Yellow: Website name 'instrument of fraud'

The owner of yellow.net.nz has been barred from using the web address ahead of a lawsuit launched by business directory Yellow that alleges the internet domain name is an "instrument of fraud"

An Auckland-based firm called Eurobelt registered the internet domain name yellow.net.nz in 1998.

Eurobelt was directed by the late Henk Klos, who had squared off with the directory service in the past over internet domains.

The company is now directed by Klos' widow, Johanna.

Yellow's parent firm is suing Eurobelt in the High Court alleging yellow.net.nz was registered to enable someone to pass off as one of its services.

It is also suing Eurobelt under the Fair Trading Act alleging that maintaining the registration of the domain name is either misleading or deceptive, or is likely to be.

Eurobelt has never used the domain name and last year Yellow offered to buy it. While both sides negotiated they have been unable to agree on a price.

It is believed that Eurobelt's ownership of the domain name is also preventing the online directory from registering the site yellow.nz. New domain names with the suffix ".nz" became available last year.

As well as launching its High Court action, Yellow filed two injunctions against Eurobelt to stop it using yellow.net.nz or registering any domain name that is "confusingly similar" to its trade marks. It also wanted an order that it is immediately assigned the disputed domain name.

I think it is seriously arguable that, in selling the domain name, the defendant would be equipping another person with a name, the use of which would be likely to give rise a false representation that the user was in some way associated with the plaintiff [Yellow].

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Yellow's lawyer, David Marriott, said that since at least 1996 the company had a broad monopoly in use of the term Yellow for online services, including directories.

Justice Timothy Brewer, in his decision on the injunction, said it was unlikely that in 1998 Yellow Pages had established sufficient goodwill so that registration of yellow.net.nz rendered Eurobelt liable for "passing off".

But the judge said it was seriously arguable that Yellow had sufficient goodwill in the trade name "Yellow" to support the contention that future use of the domain name would amount to passing off.

Justice Brewer also said that Klos intends to wind up Eurobelt, which could mean the domain name is sold.

"I think it is seriously arguable that, in selling the domain name, the defendant would be equipping another person with a name, the use of which would be likely to give rise a false representation that the user was in some way associated with the plaintiff [Yellow]," he said.

Justice Brewer ordered that Eurobelt was restrained from using yellow.net.nz or registering any other internet domain name which is confusingly similar to Yellow's trade marks.

The judge, however, refused to order that Eurobelt immediately assign the domain name to Yellow.

Justice Brewer accepted Eurobelt's argument that this would allow Yellow to secure the yellow.nz domain and significantly reduce the value of yellow.net.nz.

"I find that the risk that the defendant will be deprived of a legitimate opportunity to exploit the full value of its domain name yellow.net.nz outweighs the risk of injustice to the plaintiff," he said.